Pound Slides Ahead Of Queen's Speech

The British pound weakened against other major currencies in the European session on Wednesday, as investors awaited the Queen's speech expected to set out the government's agenda for the next session of parliament.

According to Prime Minister Theresa May's office, Queen Elizabeth II's speech will contain a number of proposals to make Brexit successful.

In economic releases, the British budget deficit reached the lowest for the month of May since 2007, figures from the Office for National Statistics showed.

Public sector net borrowing excluding public sector banks decreased by GBP 0.3 billion from previous year to GBP 6.7 billion.

Tuesday, the British pound fell after Bank of England Governor Mark Carney downplayed the possibility of an interest rate increase anytime soon.

In the Asian trading today, the pound held steady against its major rivals.

In the European trading, the pound fell to more than a 2-month low of 1.2589 against the U.S. dollar and a 6-day low of 139.85 against the yen, from early highs of 1.2635 and 140.83, respectively. If the pound extends its downtrend, it is likely to find support around 1.24 against the greenback and 137.00 against the yen.

Against the euro and the Swiss franc, the pound dropped to 8-day lows of 0.8845 and 1.2266 from early highs of 0.8811 and 1.2319, respectively. The pound may test support near 0.89 against the euro and 1.21 against the franc.

Looking ahead, at 7:00 am ET, Bank of England Chief Economist Andy Haldane is expected to speak in Yorkshire.

In the New York session, U.S. existing home sales data for May and U.S. crude oil inventories data are slated for release.